COMET AFR, page-16

Now that i have a little time , let me try and articulate why i think yesterdays released of the draft code is very beneficial

Firstly we need to start f by remembering that on a $12 per gj price , Comets current reserves are valued at 42c Before the govt intervention COI was trading at 18-18.5 and was looking to move higher after consolidating post placement

So over the last few months we have had two very important policies, the reasonable pricing mechanism now confirmed to extend to 24/25 for large producers and also confirmed smaller ones are exempt and allow them to effectively charge more. The big producers are mainly tied to LNG with gas going to lucrative contracts which need to be continued to be satisfied. Any extra developed gas from the majors will go towards increase production of LNG facilities as this is the most profitable economic use of the gas
What we also have is a policy that will tax high Co2 emitters. This means both coal fired electricity and high Co2 gas becomes more expensive. In turn it means low Co2 gas ( Comets gas) becomes a lot more attractive. What we have is electricity generators and intensive end gas users desperately looking for low Co2 gas to replace coal and high Co2 gas with interested buyers going through the roof in recent times. What this means is Comet is likely going to be selling gas at higher than 12, more likely to be in mid teens which has a very material impact on valuation.

In simple terms , these policies disincentivize a lot of new supply while making Comets gas more attractive and allowing market forces to bid up the price of Comets scarce low CO2 gas